Own A New Car

Time to read: 4 mins | April 17, 2017

Car kɑː/ noun a road vehicle, typically with four wheels, powered by an internal-combustion engine and able to carry a small number of people.

While that might be the definition, a car is much more than something that helps you get from point A to point B. It is a lifestyle statement, an aspiration as well. While in some cities, the lack of adequate public transport is one of the major reasons why an individual would purchase a car, there is no denying the sheer convenience that a car offers. So much so, that in the United States and Europe, people started queuing up outside a major car manufacturer’s showrooms ahead of the launch of their new car to put down a $1,000 deposit on a vehicle they had never even seen, much less driven!

Driving my own car has always been a dream but the rising petrol prices were always a deterrent. But over the years, taking a public transport wasn’t an option anymore, and once I had children, I knew I needed a car. I opted for a car loan and it made my life easier. I didn’t have to pay upfront and enjoyed all the privileges!

Akash Chatterjee, 39, Axis Bank Customer

While there are cars to suit every need and budget, buying a car outright might not always be an option.This is where an auto loan comes in to bridge the gap between you and your dream car. If you are planning to buy a car, take a look at how you can get the most out of the loan.

The first thing to do is to do some research and compare the available loan offerings. Remember, whether you buy a new or a used (or pre-owned) car would determine the type of loan you would be eligible for. Determine your eligibility by using an online car loan calculator. There might be certain benefits associated with taking a loan from your existing bank, such as better rates of interest, reward points, faster processing, direct debit facility for EMIs, etc.

Check your credit information report, as this will determine to a large extent whether the loan will be approved, and at what terms. Give yourself sufficient time to improve it, if required.

Further, check all the terms and conditions. Consider the rate of interest, percentage of or-road funding, loan tenure, pre-payment terms, fees and charges, as these can add up significantly to the amount you will finally pay.

Most dealerships have considerable margins on car sales, so make sure you are at your bargaining best to lower the cost of your purchase. This will help determine the loan amount, and therefore the cost of the loan itself. Do check with dealers for discounts and offers, including value-adds.

And finally, read the fine print. Never agree to sign off on documentation without having gone through it with a fine-tooth comb. After all, an auto loan is an agreement you will be getting in to for at least a 3 to 5-year term, and you need to know exactly what it says.

There are several ways to save on your car loan. Do not rush headlong into the process but instead, carefully weigh all the options and choose the one that’s right for you.

NOTE WORTHY

Buy a car, keeping in mind the city and its limitations. Opt for the best mileage because you would want to spend on petrol economically.

Customer Corner

A lot of financial institutions offer up to 90 per cent of the car value as auto loan. However, the final value might vary with lender. They check factors such as vehicle cost, type and value in second hand market while deciding the amount of loan to offer. Some banks might even lend 100 per cent of the car value.

Like any other product, you would require to submit your identity, address and income proofs along with the loan application. After submission of the documents, it takes about 3-7 days for processing the loan and getting it sanctioned.

Yes, interest rates for car loans are not fixed. They can be negotiated. If you are loyal customer to a bank and have made regular payments for previous loan(s), they might consider and revise the existing interest rate for you.

CAR LOAN CALCULATOR

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